Monday, February 08, 2010

The Parable of the Stick:

Once upon a time, the chief caveman of the Ug tribe decided that his guys didn't have effective enough sticks. They just didn't have that authoritative *thwack!* he was looking for when whopped over the head of neighboring Thog warriors, and some of their womenfolk even struggled while they were being dragged off by the hair.

So Chief Ug put out a contract for a million new sticks for his guys. His chief stick contractor put his head together with his chief R&D guy, and announced they could deliver the new Fifth Generation sticks, made of superstickium and guaranteed to have 50% greater *thwack!* than any forseeable enemy stick, for fifty-one clams each. Chief Ug was delighted, and the program got underway.

Unfortunately, the clam harvest was bad that year, plus a new peace treaty and trade agreement was signed with the Thog tribe, and suddenly the chief realized that maybe he didn't need a million shiny new sticks, and so he cut the order to 100.

"Sorry, Chief," said the guys at Stick Dynamics, "But a lot of this program is sunk costs already: engineering the superstickium, planting the superstickium orchards, training guys to whittle superstickium, cleaning up the superstickium waste in a way that won't piss off the Cave Protection Agency... Those are gonna be some mighty expensive sticks."

The Stick Dynamics accountant started counting on his toes, always a bad sign. "For a hundred-stick production run, you're looking at... um... carry the little toe... About five hundred thousand and one clams per stick."

The chief was apoplectic. "You promised me fifty-one clams a stick! The shamans are going to go ballistic when they hear this; they'll be joking about gold-plated sticks and hundred-thousand clam stick whittlers from now 'til when the moon is eaten by the night dragon!"

"That was based on a million stick contract, Chief. Actual production costs are only about a clam per stick, the rest is amortizing the R&D and developm..."

Nobody heard the rest because the chief whacked him over the noggin with the sole prototype stick and stalked off. It did *thwack!* just as promised.

The Chief never used the stick in war again, though: A stick that cost fifty-million-and-one clams is just too valuable to risk in combat. If it broke, the bad press would be horrible.

19 comments:

RobertM said...

Heh. Good one.

Anonymous said...

Should be required reading for not just military economists, but all economists. I'm not sure they'd get it, though, even when poked in the eye with a sharp stick.

AT

NYEMT said...

Hah! Good one.

@ AT: Sharp sticks for poking are a different ball o' wax. TOTALLY separate R&D path. And probably run you at LEAST three hundred thousand clams apiece. ;)

Joanna said...

I got an e-mail this morning that my uncle (USAF-ret) is leaving Boeing for a gubmint job. (I don't know any details, and prolly wouldn't understand them if I did.) The e-mail did, however, make noises about job security. Makes ya wonder.

og said...

it's true. I was there.

OA said...

"superstickium"

Narragansett for hickory, I believe.

Chief Ug could also piss off another tribe so he could justify the expense. Works well when the clam harvest is bad several years in a row.

jeff said...

But the thing is, the tribe had a history of stick purchases like this. Once they bought several special sticks, blessed by the shamans to make the weilder invisible. At the time, the 2 billion clam price seemed reasonable, as the stick would allow the tribe to take out the leaders of the opposing tribes quickly. But then the tribe they feared so much collapsed into smaller less fearsome tribes. So they ended up using the 2 billion clam sticks for rudimentry tasks such as bridge demolition, despite the outrageous costs both in clams and in magic powers from the shamans required to maintain the sticks powers.

Tam said...

Jeff,

Uh, those sticks weren't supposed to cost 2 billion; that was what happened when the program was slashed from hundreds of sticks to only twenty.

That's the whole damned point of this post.

Joe Public thinks that the B2 is a $2,000,000,000 a/c. Well, it is, if you only buy twenty instead of the 132 originally planned.

rickn8or said...

Well, come ON. The chief had a peace treaty, and would never need the Sticks of War again, anyway.

jeff said...

Tam, I got the point, I just mentioned it as a reminder that we have a history of doing this and not learning from it. And that we are the only country in the world that would even consider using $2 billion aircraft to blow up < $100,000 bridges and tanks ala Kosovo.

Tam said...

Jeff,

My apologies.

Stretch said...

I'm gonna print this off and send it to my Jr. senator ... once I dumb it down enough for him to understand.

Ken said...

Jeff's point reminded me of a gallows joke that supposedly circulated around Belgrade during the Kosovo war. It ran something like this: "I heard it cost the Americans $12 million to blow up the country. President Clinton should have just asked us -- we'd have done it ourselves for half that."

Fred said...

What's sad is just how many high end projects this could be about, not just sweet looking bombers.

It did make me laugh a little though.

benEzra said...

"we are the only country in the world that would even consider using $2 billion aircraft to blow up < $100,000 bridges and tanks ala Kosovo."

Well, we actually used bombs; the planes were not consumed in the mission. We routinely use $9 billion aircraft carriers to blow up $10,000 buildings, but the carrier is a fixed asset.

I'd be interested to know what the actual per-unit cost of the aircraft was in materials and labor, exclusive of R&D.

Oh, the decision to shut down the superstickium F-22 after only a small production run may be one we eventually regret. The Russians are now developing their own F-22 class aircraft, and they have stated flat out that they are going to sell it on the international arms market.

http://www.foxnews.com/slideshow/world/2010/01/29/russias-sukhoi-t-challenges-jet

reflectoscope said...

Brava!

It doesn't help matters any when engineers contemplate standard parts and then write a different standard for each and every single part, on each and every single different airframe.

Me, I love standards, so many to choose from.

Jim

mariner said...

R&D ain't the half of it.

Contracts are written so that the contractor gets paid even if it doesn't perform to specifications.

There is also a mind-boggling amount of graft involved.

Robert Coram, in Boyd: The Fighter Pilot Who Changed the Art of War, recounted one of Boyd's Pentagon superiors telling him that their department's mission was to ensure that the flow of money to contractors was never interrupted.

Triton said...
This comment has been removed by the author.
Mike Gallo said...

mariner beat me to it; I just read that Boyd biography, and it's an excellent behind-the-scenes on how these decisions get made.